New CEB report predicts 6% increase in healthcare costs in 2017

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Dive Brief:

CEB, a best practice insight and technology firm, and DirectPath, a firm specializing in employee engagement and healthcare compliance for Fortune 1000 employers, released a report predicting that organizations expect a 6% increase in healthcare costs in 2017. The 2017 Medical Plan Trends and Observations Report is based on analysis of 975 employee benefit health plans.

The report also predicts that employers are looking past cost-sharing since the high-end “Cadillac” tax faces potential repeal and employees are struggling to manage high-deductible plans.The report suggests that employees are losing interest because they can’t carry the associated HRAs and savings accounts meant ot make HDHP's more manageable to a new job.

A key finding in the report is that health savings plans (HSAs) serve high-paid workers better than lower-paid employees. Workers with HSAs earning under $50,000 a year were less likely to visit their doctors for preventive care, such as breast screenings and flu shots, in order to save money for costly medical treatments.

Dive Insight:

Other reports have backed up the slowing interest in HDHPs, though millennials are notably still adopting them. While originally touted as a way to save money on plan design, HDHPs only truly work for employees if proper education programs are in place to help workers understand how their plans work and what resources they can access.

Wellness programs are another important aspect of recent changes in healthcare. The EEOC released rules last year explaining and patching over the various legal pitfalls regarding wellness program incentives. Of course, parts or all of these rules could shift if any form of ACA repeal goes through.